Bitcoin On-Chain Losses Approach Last Bear Market End Levels

Bitcoin's price has seen significant volatility in recent days, with on-chain data showing rising losses and declining profits. The cryptocurrency is trading near $64,000 as of February 6, 2026, down nearly 50% from its October peak. Analysts are noting that the current on-chain conditions resemble those seen at the end of previous bear markets.

On-chain metrics indicate that the proportion of Bitcoin supply in loss has climbed to around 40%, signaling structural weakness. This trend is not typically seen during healthy corrections and is more consistent with early bear market phases. The decline in supply in profit further supports this view.

Market participants are watching closely for signs of stabilization or a deeper correction. The current price is below the 61.8% Fibonacci retracement level on the daily chart, facing resistance at key levels. The Relative Strength Index (RSI) is in oversold territory at 29, suggesting strong bearish momentum.

Why Did This Happen?

The recent decline in Bitcoin has been driven by several factors. The price has failed to trade alongside gold and silver as part of a broader debasement hedge trade. This lack of correlation has dampened bullish sentiment.

Regulatory developments and market liquidity have also played a role. The passage of crypto legislation, such as the CLARITY Act, has not materialized as expected, reducing near-term optimism for the market.

What Are Analysts Watching Next?

Analysts are closely monitoring on-chain data and price patterns. The expansion in supply in loss is seen as a cautionary signal, suggesting that the market is in early bearish territory rather than a short-term correction.

Technical indicators suggest that a recovery above key levels, such as $80,000, could extend the rebound. However, the primary trend remains bearish, with the possibility of a dead-cat bounce pattern.

Corporate holdings of Bitcoin are also under pressure. Strategy, the company led by Michael Saylor, reported a $12.6 billion net loss in the fourth quarter of 2025, largely due to the decline in Bitcoin's value. The company now faces significant unrealized losses on its 713,502 BTC holdings, acquired at an average cost of $76,052 per coin.

What's the Market Outlook?

Market participants are looking for signs of a potential bottom. Historical patterns suggest that durable bottoms tend to form after further expansion in supply in loss and greater price compression.

Investors are also watching for catalysts, such as regulatory clarity or macroeconomic developments, that could shift market sentiment. The recent nomination of Kevin Warsh as the next Federal Reserve chair has increased uncertainty, with some analysts suggesting it could lead to a smaller Fed balance sheet and greater pressure on risk assets.

The overall liquidity environment remains a concern. Bitcoin's price slide has been accompanied by outflows from spot ETFs and a reduction in overall market capitalization. Institutional buyers have been less active, and leveraged positions are being unwound.

The on-chain data suggests that the current phase is more akin to a consolidation period before a potential trend continuation. Some analysts compare this to Alphabet's past price structure, where a period of consolidation was followed by a breakout. If the analogy holds, it implies that Bitcoin could be transitioning into a new phase of expansion after a period of consolidation.

Investors are advised to monitor key levels and on-chain metrics for signs of a potential reversal. The market remains in a bearish phase, and any recovery attempts are likely to face significant resistance unless stronger bullish signals emerge.